April 26, 2021
Joint Congressional Energy Commission
Congress of the Philippines
Attn.: Senate Energy Committee
House Energy Committee
Re: Power Demand and Supply Outlook for the Summer
Republic Act No. 9513 or the Renewable Act of 2008
Thank you once again for the invitation to participate in the JCEC . We respectfully submit the position paper of the Laban Konsyumer Inc. on the power supply outlook and renewable energy law.
- Power Supply Outlook for the Summer
Our evaluation , analysis and recommendations are as follows :
- There was a long delay in the publication and release of the 2021 to 2023 Grid Operating and Maintenance Program or GOMP.
- The GOMP was uploaded on April 21, 2021 in the website of the National Grid Corporation of the Philippines ( NGCP) and the Department of Energy ( DOE ) .
- The GOMP should have been issued in October 2020.
- Because of the long delay, there are not much meaningful time for the stakeholders to prepare for the coming red and yellow alerts .
- The 2021 Weekly Demand, Supply and Reserve Profile as of April 15, 2021 shows three ( 3 ) Red Alerts and ( 5 ) Yellow Alerts for the summer months April, May and June .
- The red Alerts are the periods April 23 to 29, May 28 to June 3 and June 4 to 10.
- The yellow alerts are the periods April 16 to 22, April 30 to May 6,May 7 to 13 and June 11 to 17.
- Per DOE Circular No. 2020-02-0004 ,there should be no maintenance schedule during peak quarter. But you have to look at the charts for Luzon, and the power situation does not look good as April, May and June have planned outages, whether unplanned, original and revised schedules .There are too many power plant outages being projected for the coming weeks and months and this situation will heavily burden consumers thru higher generation charges .
- Meralco said spot market prices increased by Php 2.5991 per kwh for the April billing month .
- The prohibited plant outages , whether unplanned , original and revised schedule of the Power Supply and Demand for the peak quarter are as follows :
-BCF Unit 1 300 MW March 31 to April 7
-Please Unit 1 647 MW, April 7 to April 30
-SBPL, 506 MW, April 3 to April 27
-Limay PH 1 ,150 MW, Feb 26 to April 1
-GN Power 36 MW ,March 1 to May 23
– Petron 36 MW , Unit 3 , May 1 to May 26
-Pagbilao 382 MW, June 12 to July 11
– Petron Units 1 to 4, 36 MW each , June 1 to 7
– SLPGC, Unit 1, 150 MW, June 15 to July 30
-SLPGC, Unit 2 ,150 MW , June 1 to July 15
– Limay , PH 1 ,150 MW June 15 to June 30
– Limay ,PH 3, 150 MW, June 15 to June 30
-Malaya ,350MW June 1 to June 30
11.Transmission facilities nationwide have almost negligible or isolated maintenance schedule in the summer months .
12. In sum , consumers face price hikes and rolling brown outs this summer .
I3. The DOE should explain why Maintenance of plants are authorized during the peak quarter in violation of their Circular .
14. The market operator should quickly spot plant owners that will take advantage of prices and impose fines on erring firms .
- Republic Act 9513 or the Renewable Act of 2008
We respectfully propose to repeal the incentives granted by the Renewable Energy Act of 2008 especially the Feed in Tariff or FIT that are paid to the renewable energy developers as well as the Feed in Tariff Allowance of Fit Allowance that are collected from all on grid electricity consumers for the following reasons :
- The Secretary of Energy Alfonso G. Cusi in the Virtual Economic Briefing of the Philippine Embassy in Washington D.C. held on April 15, 2021 Philippine time, relating to the Philippine Energy Plan of 2018-2040 , announced that “ we have stopped the Feed in Tariff or FIT which proved to be a big mistake as it forced electricity prices in the country upwards . We cannot have our consumers shoulder the financial burden of such subsidies any longer .This holds true most especially since RE technologies and their market competitiveness have significantly progressed in the past decade “
- There are supervening events and new implementing rules in DOE Circular No DC 2018-02-0003 that ensures power rates are reasonable , competitive , transparent and subject to public scrutiny , which are unlike the FIT system of the Renewable Energy Act.
- The enactment of the CREATE law or Republic Act No. 11534 had improved the income tax liabilities of the Renewable Energy developers and the lower corporate income taxes at 25% is effective July 2020 and such savings on taxes should be passed on to the consumers immediately thru a lower Feed in Tariff Allowance .
- Congress may amend the Murang Kuryente Act or Republic Act No. 11371 to subsidize Fit Allowance . Only Php 8 Billion of the Php 200 Billion allocated for the MKA had been appropriated. The current Fit Allowance is Ph0.0983 pkwh. The present pending application is to increase to Php 0.2008 pkwh.
Finally , for the information of the JCEC , as authorized by the Energy Regulatory Commission in May 2020, FIT for solar energy had increased from Php 9.68 to Php 11.2758 per kwh while wind energy had increased from Php 8.53 to Php 9.89⁷6 per kwh , and all these upward adjustments had been made retroactive to 2016. The increases were authorized despite ERC approved degression rate of 6 % after year 1 for solar energy and 0.5 % after year 2 for wind energy .
Our consumer group had filed a petition in the ERC to annul the FIT increases in ERC Case No. 2021-001 RM which was docketed in January 13, 2021. The petition had been endorsed to the proper division of the ERC.
Thank you very much.
Very truly yours,
Atty. Victorio Mario A. Dimagiba, AB, LLB, LLM
President, Laban Konsyumer Inc.